Ok I know very little about this...but by parents approached me as they are looking into their assets & are considering several options, one being doing a reverse mortgage & giving proceeds to my sibling & me to help us. I was quite in shock & while sure we could use the money....I think it would probably really mess up our BK...I don't know if they can even do this. But since we haven't shared with them that we are filing, it is a real mess. Any thoughts? Can we accept a gift after filing? Would that really get us in trouble? Perhaps down the line, which could possibly help us with making payments, giving us a cushion, even paying off early.
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What Chapter are you filing? At the least, this will affect your income schedules, depending on how much and when it is offered and received.
A reverse mortgage is also a dangerous move, in its own right. For your parents, it will tap what is probably their largest asset, depleting something THEY may need in the future. Also, the fees associated with reverse mortgages are terrible. My own in-laws took a reverse mortgage on their property. It appraised for 120k, but they were only allowed to take about 80k in equity.
They PAID nearly 20k in closing costs to get 60k. This is abusive usury, plain and simple. I never would have suggested they do this, but they did so anyway, and told us about it later.
There are also more personal questions that only you and your family can answer. Will the reverse mortgage, if taken to benefit you, in any way guarantee you won't STILL need to file bk? Or will it just buy you more time? If the answer is that you likely will still need to file, I think it is a poor choice.
Good luck11-20-09-- Filed Chapter 7
12-23-09-- 341 Meeting-Early Christmas Gift?
3-9-10--Discharged
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